BuildSafe was chosen as the 10-year structural warranty broker for Liverpool’s Baltic Triangle development, Eclipse which was being constructed and developed by Ridgemere Ltd.
The drive for the regeneration of the Baltic Triangle over the last decade led by Liverpool City Council and the best of the North West’s developers has contributed to a vibrant and thriving location that was recently voted ‘Coolest Place to Live in the UK’.
With an exciting location secured and the design approved and confirmed, the next step for Ridgemere Ltd was to ensure that the sharpest 10-year structural warranty was in place.
With a GDV of £33.3million and a build cost of just over £20million, a selection of the A-rated market could be immediately excluded due to some insurers’ capacity being limited at £5million or £10million per single structure.
In addition, with many of the units intended to be sold off-plan, Ridgemere Ltd also required Loss of Deposit protection. Few warranty providers offer insolvency cover as an ‘add on’ and for those that do, the eligibility depends on the developer having an excellent financial footprint and track record.
Another restriction that developers face is that the maximum amount of deposits that can be insured with the insolvency cover via the warranty is £2million (10% of £20million GDV). This leaves developers who are building schemes with a GDV of over £20million, or developers taking higher deposit amounts (e.g. 30% deposits for units sold as investments/overseas) with unprotected deposits.
BuildSafe’s experienced structural warranty expert, Ellie Farrell, was able to promptly identify both the limitations and the expertise of each warranty provider and as a result, saved the developer’s valuable time in knowing which corners of the market are best suited to their specific scheme.
In addition, BuildSafe were able to recommend and secure an additional stand-alone Loss of Deposit bond to help increase the amount of deposits insured.
For example, Ridgemere sold all 217 units off-plan, and wanted to take 10% deposit per unit, securing £3.3million worth of deposits. With £2million already being covered by the insurers’ insolvency cover, the remaining £1.3million could be then covered with a stand-alone Loss of Deposit bond as a ‘top-up’ so that the cash could be used on the build, again more cost-effective than borrowing from the banks.
BuildSafe helped secure a 10-year warranty quotation from an A-rated insurer at a rate of 0.75% of the total insurance sum under their SPV St James Liverpool Ltd. This quote, (already much sharper than average for this type of scheme) also included developer insolvency insurance, which allowed the developer to protect 10% deposits up to £2million (£20million GDV), with the option to protect a higher amount of deposits should they have required it.
10-year structural warranty provider
Buildsafe can help developers and contractors find a cost-effective, appropriate warranty and deposit protection package. If you are a developer with projects in the pipeline, Build Safe can deliver a tailored solution to suit your needs.
At BuildSafe, we see our role as an independent advisor, who reviews the merits of each policy to help you make well-informed comparisons. We also save you time in procuring quotes, analysing and comparing quotes, and negotiating the commercials. In addition we manage the warranty process throughout the build, handle the all-important inspections and key issuing of final certificates.